Budget statement means questions remain on net zero delivery

06 Mar 2024

A slim Budget statement in terms of energy and manufacturing policy contained a few stimulus measures but the major questions on how networks and buildings will be upgraded for net zero will be addressed elsewhere.

We were disappointed not to see announcements on expanding the scope of VAT relief and the Boiler Upgrade Scheme to include a wider range of electric heating technologies. It is critical that there is support in the UK for a level playing field for suitable heating products to give consumers and specifiers choices for every building.

For networks, we got welcome confirmation of a slightly larger pot for the Green Industries Growth Accelerator, announced earlier this week, which will allow the electricity networks supply chain to compete for a pot of £390m funding for the industry in the UK. This was an important reminder of the importance of improving the supply chains for electricity networks. BEAMA will continue our work contributing to the Transmission Acceleration Action Plan and is looking forward to the Network Commissioners review of the Distribution network.

Elsewhere for the energy system, another planning consultation has been published which will seek to smooth the process for starting a range of infrastructure developments. And we got confirmation that the Government sees nuclear energy providing a quarter of the electricity supply mix by 2050.

There was no new funding allocated to improving the energy performance of buildings, meaning the current portfolio of financial support including the Energy Company Obligation, Boiler Upgrade Scheme, Home Upgrade Grant and others will be the vehicles for domestic energy upgrades until the next election.

In the Budget documentation there was a restatement of other network-related plans to be taken forward by the National Energy System Operator, including cutting grid connection times and forming the Strategic Spatial Energy Plan, but these are not new announcements.

All in all, this limited coverage of energy related measures reflects a situation where we have an election coming, we have dozens of consultations either still awaiting a Government response or not yet published, new institutions that will be responsible for taking forward networks deployment, and the lack of a clear delivery plan to meet buildings decarbonisation aims. Given all that, it is clear that many questions still remain on how we will meet Carbon Budgets and Net Zero while supporting the industry and delivering good outcomes for consumers.

It also remains clear that this need for delivery plans will not go away, and BEAMA hopes that before long we will get further clarity on the Treasury’s role in unlocking UK industry’s potential to contribute to reaching Net Zero. Specifically on financial measures, we need to see consultations and further views on the price of electricity, VAT relief, green taxonomy and support for green finance. At BEAMA we will be urging all parties in the runup to the election to increase support for these key measures.